DC And FC Automation Economics

Transcription

1 DC And FC Automation Economics Presented by : Dale Pickett Kelly Reed

2 Contents 2 DC And FC Automation Economics August 31, 2016 Discussion Objectives - 3 Why Companies Automate - 4 When To Automate - 5 Order Selection Time Breakdown - 6 Limiting Factors Of Automation - 7 WCS vs. WES Systems Overview - 8 Can You Automate With A 3PL / LSP? - 9 Broken Case Alternatives - 10 Executive Summary Of Options 22 MHE Types - 26 DC And FC Automation Current Trends And Concepts - 27 Key Takeaways 28 Five Year Strategy 29 Discussion And Sharing - 30 Get In Touch - 31 Session Survey - 32 Copyright 2016 Tompkins International. All Rights Reserved

3 Meeting Objectives 3 Overview - Understand why companies automate - Discuss the brains behind the MHE - Illustrated examples of MHE Pros and Cons - Supplier options - Trends

4 Why Companies Automate 4 Looks Really Cool! Reality Growth Drives Inefficiency Requires Justification / Payback

5 When To Automate 5 Trigger Points To Consider Automation Space Labor - Product stored / staged in aisles (open overhead, wide aisles, poor access) - No expansion options (landlocked, can go vertical) plus staffing - major automation investment staffing - focused smaller automation investment - <50 staffing - has to be throughput driven to consider Volumes - Throughput requirements - unpredictable, inconsistent patterns - High volumes of each and case pick orders - Large quantity of single SKU batches Environment - Cold / frozen storage - Sensitive product requirements

6 Order Selection Time Breakdown 6 Order Selection Time By Activity Pick and Put, 15.0% Other, 10.0% Order Setup, 10.0% Search,15.0% Travel Time, 50.0% Travel time typically accounts for 50+% of the order selection job function which is why goods to man systems can significantly improveproductivity.

7 Limiting Factors Of Automation 7 Automation Challenges Justification 2-5 year window for full automation justification Factor in maintenance and IT support costs Product Mix Location and pick engine sizing (year to year consistency) Replenishment - factors to the pick face/pick engine Business growth - ability to add business units / product offerings Labor Cost And Availability Lower cost labor minimizes benefits in specific global markets Flexible (temp labor options) - minimize peak season impacts / risks Cheap Space Low lease costs decrease short-term automation benefits Automation is a 7+ year investment (long term lease / owned operations) Automation is difficult to relocate without major business disruption

8 WCS vs. WES Systems Overview 8 The Tompkins WES works to improve the overall efficiency of an automated distribution center. WMS Core WCS functionality. Advanced optimization, management, and automation capabilities (WES functionality). Integration with WMS and automated subsystems. Unit Sorter MHE Goods To Person Pick / Put To Light

9 Can You Automate With A 3PL / LSP? 9 Three Contract Options 3PL Facility - 3PL owned, operated, and managed facility 3PL Managed - Client owned, 3PL operated, and managed facility Hybrid Contract - Mix of 3PL and client owned space, equipment, and lease, but 3PL managed and operated Automation Impacts 3 PL Facility Equipment is amortized over the length of the contract, so a longer contract (5-10 years) is typical (generally on a per unit cost absorption formula). 3PL owns the equipment at the end of the contract. Client pays the maintenance and upgrades during the contract. Upgrades and automation are tied to performance improvements annually. 3PL Managed Equipment is depreciated over 7 years, but 3PL contract can be any length to reduce risk with any specific 3PL (re-bid, change every 3-5 years). Client owns the equipment at the end of the contract. Client pays the maintenance - Client owned, 3PL operated and managed facility. Hybrid Contract Truck leasing / corporate WMS are more common due to national contracts. 3PL managing a client facility and upgrading is often the hybrid set-up if capital required for equipment (client assumes full responsibility at contract termination) but owns equipment - WMS may be 3PL license. High automation may be tied to shared facility cost allocation. Minimize upfront capital Walk away at end of contract Long-term Partnership Upfront Capital to maintain control Asset at end of contract Maintain or convert to 3PL Facility as an option Numerous options based upon capital vs. operational cost desire Common for Internal to 3PL management switch on owned sites Shared site upgrades

10 Broken Case Alternatives High / Low Bay Shelving / Modular Drawer Picked with an order picker or cart and transported to shipping storage of low cube SKU s 10 Advantages: Low equipment cost per location High flexibility / ease of reconfiguration Excellent load access Easy to install / setup Above average ability to house variable load sizes Easy access for picking for low bay shelving Very low maintenance Disadvantages: Below average storage density potential Average FIFO maintenance Average inventory and location control Average item security Manual

11 Picking / Put Technologies 11 Possibility of using one or all listed methods

12 Horizontal Carousels 12 Goods To Man To Horizontal Carousels Products stored in bin locations within horizontal rotating carousels which are typically setup as a set of 2-3 pods per operator / pick station. Carousels rotate to bring required product to operator. Operator picks one or more orders at a time and confirms via RF scanner or voice terminal. Remaining carousels rotate to prepare for next pick to minimize dwell time. Benefits: - No travel time, therefore higher pick rates - No operating aisles - high density storage - Can accommodate a high SKU variety in small warehouse footprint Shortcomings: - Replenishment of carousel requires quiet time with no picking; or a slow down in the overall throughput of machine. - Throughput capacity of carousel is limited by maximum operator pick rate. When To Consider: - If the entire system is intelligently designed with put to light to batch pick multiple orders concurrently, carousels can be used to support high- speed high-throughput split case environments. - However, a more typical application is for slow moving parts storage where throughput is relatively low. - Most suitable for small cube SKUs that have high order lines.

13 Broken Case Alternatives 13 A Frame Automatically dispenses product on a central belt or directly to tote Orders can be consolidated to be sent to shipping Lines per hour: 300-3,600 Advantages: - High Productivity - Excellent item security - Very good inventory and location control - OK accommodating sterile packaging Disadvantages: - Complexity - High investment cost - High maintenance cost - High control system requirements - Low flexibility / ease of reconfiguration

14 Broken Case Alternatives 14 Mini-Load AS / RS System indexes to next SKU to be picked and transports to pick and pack station Orders can be consolidated to be sent to shipping Loads per hour (dual cycle): per aisle Advantages: Excellent ergonomics at the put away / pick stations Excellent item security Very good inventory and location control Consolidation of orders for shipping Reduces travel of SKU s Can be stored in original container Accumulate high degree of SKU variety Can go up to 60 in height Disadvantages: High investment cost per system Restocking High control system requirements Low flexibility / ease of reconfiguration Storage location size fixed Must be conveyable Not applicable for significant demand variations

15 Broken Case Alternatives 15 Goods To Man The benefits of an Automated Miniload System can be increased by implementing a Goods To Man (GTM) System on the front end for picking: Reduce wasted touches and movements, keeping operators from what they should be doing: picking. Can reach rates between 500-1,000 lines per hour (per operator). Are ergonomically superior to traditional picking methods, severely reducing costly employee injuries and employee lost time. Can be configured in a wide range of set-ups with one-to-one or one-to-multiple type picking scenarios. Stations can be added to an existing system with minimal impact to operations.

16 Broken Case Alternatives Miniloads 16 Several options exist for high-speed less than case pick automation: Stacked carousels with automatic inserter extractors Traditional aisle crane miniload Tote shuttle system Of the three options the tote shuttle system has the greatest throughput capacity, flexibility in product handling, as well as ease in reconfiguration and expansion. Carousel w / Inserter - Extractors Tote Shuttle System Miniload Cranes

17 Broken Case Alternatives Shuttle Systems Shuttle systems offer the greatest flexibility in that: It can handle both totes as well as cartons. Additional aisles can easily be added with minimal impact. System can start with roaming shuttles, adding more in the future as needed. Shuttles can be swapped for maintenance or repairs without impacting operations. Totes can be accessed inside of storage racking via maintenance catwalks in racks. Shuttles allow for better handling of any changes in demand while reducing the chances for bottlenecks (compared to miniload cranes and carousels) due to the fact there is shuttle redundancy and availability in a single aisle. Allows facilities to be built taller, reducing construction costs by reducing overall footprint (also allows for greater expansion capacity for fixed land boundaries. Shortcomings: Capital investment requirement requires high throughput volume to be justified. Certain size and weight restrictions apply for the shuttle to be able to handle the product. When to Consider Extremely high split case throughput environments where high productivity is critical to success. Storage buffer needed for sequencing of containers in between the picking and palletizing process (e.g. ensure heaviest totes are place at bottom of pallet). 17

18 Click & Pick Powered By AutoStore 18 Goods To Man Click & Pick System - At receiving, products are placed into standardized totes that get conveyed to induction points for the AutoStore system. - Robotic mobile vehicles move on an XY axis atop a 17 high storage buffer consisting of vertical stacks of totes. - Robots automatically retrieve totes from the vertical stacks for presentation at picking work stations. - Operator picks required SKU / quantity and tote with residual inventory is returned back to the top of the cube to be stored in a vertical stack. Shortcomings: - Constrained to 16 of product height usage (but it can be put on a mezzanine). - Robots run on batteries and are available for 22 hours / day. Benefits: - No travel time therefore higher pick rates. - Operators can pick one or many orders concurrently. - Eliminates putaway and replenishment labor. - Top of grid is at 17-3 in height - no operating aisles or lost space. Preferred height is 22 CSH. - Can accommodate a very high SKU variety in small warehouse footprint. - Self-optimizing slotting system - faster movers always at the top of the cube. - Highly secure storage environment. - Flexibility to easily expand system.

19 Robot Systems 19 Goods To Man To Robot System At receiving, products are replenished to shelving pods that are retrieved and transported by robots. At picking, robots fetch the shelving pods (or pallets) and transport them to work picking station(s) where operators perform continuous picking. Operator typically picks multiple orders concurrently with the aid of a laser pointer and put to light to ensure accuracy. Robot returns shelf pod back to storage area. Benefits: - Significant reduction in travel time - Operators typically pick orders concurrently - Eliminates replenishment labor - Sophisticated software used to optimize all robot activity to minimize investment requirement and labor efficiency - Highest flexibility to expand or relocate system to a new building Shortcomings: - System makes poor use of height unless extensive infrastructural mezzanines / elevators / conveyors are used - Pick station ergonomics Vendors Include: Amazon Robotics Grey Orange Fetch Robotics SwissLog Grenzebach

20 Unit Sortation Alternatives 20 Sortation Systems Used with a conveyor to sort units for order consolidation for packout. Advantages: - Reduce manual movement of SKU s - Allows for batch picking - Maximize cube of building - Reduces material handling equipment requirements - Provides sorting of individual units for order consolidation - High degree of order accuracy - Capably of extremely high sort rates Disadvantages: - Cost - Product size restrictions - Complexity and maintenance - Not applicable for significant demand variations - Dedicated floor space - Scannable barcode for each item, tote or carton Sortation Types Tilt Tray Cross Belt Bombay Linear Belt

21 Transport Alternatives 21 Conveyors And Sortation Systems Transport conveyable SKU s from receiving to inventory and from inventory to put to order or shipping. Advantages: - Reduce manual movement of SKU s - Maximize cube of building - Reduces material handling equipment requirements - Provides staging of SKU s on conveyor - In conjunction with picking, orders can be consolidated Disadvantages: - Cost - Product size restrictions - Requires downstream sortation - Complexity and maintenance - Not applicable for significant demand variations - Dedicated floor space - Fixed travel path - Scannable barcode for each item, tote or carton Sortation Types Tilt Tray Cross Belt Sliding Shoe Media Sort Bombay Linear Belt

22 Executive Summary Of Options 22 Environment System /Technology Capital Investment Paper-Based Paper PickList Minimal: $5 -$10K RF RF Scanning $3-5K / User + $75-150K for infrastructure Pick to Cart Pick to Light,Voice or RF $6-12K / Cart + $75-150K for infrastructure Pick to Light Pick to Light toconveyor $100 - $130 per location + $50 250K for infrastructure Voice /RF Voice with Optional RF $5-$7.5K per voice unit + $75 125K for infrastructure Automated Horizontal Carousel $85 - $125K per carousel + $125K cost of infrastructure Automated Miniload ASRS $ K per ASRS Miniload Aisle + $ Kservices Automated Automated Automated Automated AutoStore Click&Pick Robotic Systems Multilevel Shuttle Aframe $1 Million for 10 robots with 1 station for picking + 1 station for replenishment for up to 5,000SKUs. DC with robots costs between $2 to $4 Million $650,000 - $1.2 Million per operating aisle depending on the number ofshuttle robots needed. Higher rates require more complex front ends for operator work cells $1 - $1.5 Million per A-frame. Conveyor feed system is a little more complex at dump station. Typically must pass to second sub-sytem to complete order

23 Executive Summary Of Options 23 System / Technology Receiving -Putaway Rate (LPH) Replenishment Rate (LPH) Order Picking Rate Typical (LPH) Order Picking Rate High (LPH) Cost Paper Pick List $ RF Scanning $ Pick to Cart $$ Pick to Light to Conveyor $$$ Voice with Optional RF $$ Horizontal Carousel $$ Miniload ASRS $$$ AutoStore Click&Pick $$$$ Robotic Systems $$$$$ Multilevel Shuttle $$$$$ Aframe $$$$$

24 Executive Summary Of Options 24 System /Technology Benefits Shortcomings Paper Pick List RF Scanning Pick tocart Pick to Light to Conveyor Voice with Optional RF Horizontal Carousel Miniload ASRS AutoStore Click&Pick Robot Systems Multilevel Shuttle Aframe Simple and Low Cost Real time data capture at alow investment Less travel time due to batch picking High speed picking with highaccuracy and dynamic balancing Hands free, fast learning curve, Flexible to use across entire DC No travel time, high densitystorage therefore low footprint, Excellent for batching No travel time, high densitystorage therefore low footprint up to 60' High pick rates, high accuracy,high storage density for large SKUcount High pick rates and flexible system to relocate High pick rates, high accuracy,highest throughput, flexibility High pick rates, high accuracy,highest throughput Low productivity and accuracy Not real time Too slow for high volume picking due to handling device/scanning Carts are heavy and slow to maneuver and put errors can easily be made without multiple scans High cost solution when SKU counts are high May be too slow for some highvolume operations Carousel replenishment requires quiet time; constrained throughput capacity Slow to Medium throughput capability Constrained to 16' of height and robots run on batteries After Kiva was purchase by Amazon new players have to catch up; weak use of height Higher capital investment requirement Higher capital investment requirement, product capability for dispense

25 Executive Summary Of Options 25 Order Lines Throughput per Day Scenario System / Technology 0 to 1,000 1,000 to 5,000 5,000 to 10,000 10,000 to 15,000 15,000 to 20,000 20,000 to 25,000 25,000 to 50,000 50,000 to 100, ,000 to 150, ,000 to 250, Paper Pick List 2 RF Scanning 3 Pick to Cart 4 Pick to Light to Conveyor 5 Voice with Optional RF 6 Horizontal Carousel 7 Miniload ASRS 8 AutoStore Click&Pick 9 Robotic Systems 10 Multilevel Shuttle 11 Aframe Strong Fit Moderate Fit WeakFit

26 MHE Types 26 Order Consolidation Pick and Pass (Single Carton) Pack Station Consolidation / Packing Pack Station to Consolidation / Over Pack Area Pre-pack and Sort to Pack Stations Consolidation Sorter Options - Narrow Belt sorter - Tilt Tray - Cross Belt Sorter Packing Dunnage (Air, Paper, Carton Size Selection) Manual Tape In-line Taping Automatic Taping Manual Label Print and Apply Label

27 DC And FC Automation Current Trends And Concepts 27 Warehouse robotics AGV s and autonomous vehicles (driverless) High speed conveyors and sortation Automated storage and retrieval Pallet unload and build equipment Each pick and broken case pick automation Voice pick and pick to light systems Wearable technologies and mobile applications

28 Key Takeaways 28 Multiple levels of split case picking systems exist across varying levels of technology: there are also others beyond the 10 included here that we did not have time for. There is no such thing as a best technology because the business requirements vary by type of operation. Choosing a split case picking system with a good fit requires an understanding of the distribution center operational profile, shapes and sizes of products, flexibility requirements, overall throughput volumes, etc. As volumes increase above 10,000 order lines / day, the fit for automation solutions starts to provides more value and potential return on investment. Distribution centers and fulfillment centers have very different characteristics and requirements which drives automation options. Each facility must be designed for the requirements of that operation whether a DC or FC. Careful analysis must be done to determine the best set of options for a facility and the level of automation and systems to run the operation at an acceptable return on investment.

29 Five Year Strategy Methodology 29 Phase I Facility Automation Evaluations Will utilize the multi-step approach shown below. Data Collection and Formatting Step 1a Process Map and Identify Tactical Process and Layout Opportunities Develop Storage and Distribution Requirements Define Future Functional and Operating Requirements Step 1 Step 2 Identify and Develop Best Practices Step 3 Step 4a Implement Tactical Changes Develop Automation and System Alternative Designs Step 4 Evaluate Alternative DC Facility Viability, Value and Impact Step 5 Step 0 Analyze DC Layout & Equipment Alternatives Develop Recommendations and Implementation Plan Prioritize Facility Specific Initiatives into a 5 year Network Plan Detail Design by Facility thru Implementation Step 6 Step 7 Step 8 Future Phase

30 Discussion And Sharing 30

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